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You have been asked to join a prestigious company, Blue Lagoon Inc. as a financial analyst, Blue Lagoon Inc uses about S1M of inventory per

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You have been asked to join a prestigious company, Blue Lagoon Inc. as a financial analyst, Blue Lagoon Inc uses about S1M of inventory per month. Seeking help, the purchasing manager has come to you for help with a buying decision. He can get a big discount on $15M of inventory by buying it all at once. However, there is some risk of obsolescence when buying that far in advance. He understands that large purchases are frequently analyzed by means of capital budgeting techniques and asks for your help in deciding whether to buy the specially priced inventory. How would you advise him? Is capital budgeting appropriate

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